In Texas, the collateral source rule prevents compensation received by an injured party from sources other than the defendant from being deducted from the total damages awarded. This ensures that defendants cannot reduce their liability by referencing payments made by third parties, such as insurance companies.

While an experienced car accident lawyer can provide tailored advice, this article offers an overview of the rule and its application in personal injury cases.

What Is the Collateral Source Rule?

The collateral source rule applies to both personal injury and property damage cases. Under this rule, evidence of third-party payments to the injured party cannot be introduced at trial to offset damages owed by the defendant. This ensures fairness and prevents defendants from benefiting from the injured party’s external sources of support.

Examples of Collateral Sources

Collateral sources include payments made from the following:

• Health insurance
• Medical insurance
• Property insurance
• Workers’ Compensation benefits
• Disability benefits
• Life insurance

When the Rule Does Not Apply

It’s important to note that payments made by the defendant’s own insurance company to the plaintiff are not protected by the collateral source rule. These amounts can be deducted from the total damages owed to the injured party.

Reimbursement Requirements for Plaintiffs

While the collateral source rule prevents deductions from damages, injured parties may still need to reimburse the compensation source from their recovery. For example, medical providers often place liens on personal injury settlements, requiring repayment for services rendered.

Exceptions to the Collateral Source Rule

There are exceptions to the collateral source rule, including:

• If the injured party fails to seek treatment or return to work after receiving compensation.
• In certain medical malpractice cases where state laws allow evidence of collateral payments.

Investigation of Collateral Sources

Although collateral source payments cannot be introduced at trial to reduce damages, defendants are typically allowed to investigate the nature and amount of such payments. This may impact case strategy during pre-trial negotiations or discovery.

How Roberts & Roberts Can Help

At Roberts & Roberts, our experienced personal injury attorneys are committed to protecting your rights and ensuring you receive the compensation you deserve. Navigating the complexities of the collateral source rule requires a skilled legal team that understands Texas laws and how they apply to your case.

Contact Us Today

If you or a loved one has been injured, don’t let legal complexities stand in the way of your recovery. Call us at 800-248-6000 or contact us online for a free consultation.

FAQs About the Collateral Source Rule

What is the main purpose of the collateral source rule?

The rule ensures that defendants cannot reduce their liability by referencing payments received by the plaintiff from other sources, promoting fairness in personal injury cases.

Does the collateral source rule apply to all payments?

No, it does not apply to payments made by the defendant’s insurance company, which can be deducted from damages owed.

Can the collateral source rule affect settlement negotiations?

Yes, while collateral payments are not admissible at trial, defendants can investigate these payments, which may influence settlement discussions.

Do I have to repay my health insurance from my settlement?

In many cases, yes. Health insurance companies may require reimbursement for medical expenses covered, often through a lien on your settlement.

How can a personal injury lawyer help with the collateral source rule?

An experienced lawyer ensures that you understand how the rule applies to your case and helps you maximize your compensation while addressing potential reimbursement requirements.